Second home owners complain council tax premium is forcing them into debt
Bruce Sinclair, local democracy reporter
A second homes owners’ council tax campaign group has said the “unaffordable” premium for such properties is forcing their owners into debt.
The group has sent a letter to Pembrokeshire County Council, which has increased its second homes council tax premium to 200 per cent for this financial year, from a previous 100 per cent, meaning such properties effectively now pay a treble rate.
Properties used as holiday lets were exempt from the premium if they could be let over a number of days per year, which has risen to 182, up from a previous 70.
Since the premium rise, second home-owners have been faced with hefty council tax bills, as much as £15,000 in some cases.
‘Grossly inflated’
The letter, signed by 100 members of the Pembrokeshire Council Tax Premium support group, says: “In April when most of us received our council tax bills with their grossly inflated rates. Most of us have a council tax bill of £5,000 to over £12,000 for 2024/2025. This is unaffordable.
“Given that your stated goal is to make us sell our properties, it is logical for you to have make the tax unaffordable.
“Only 29 per cent of our members received notice of the increase, and no effort was made to contact owners outside the area as is advised. Most knew about the premium increase when they received their 2024/2025 council tax bill.
“This oversight has made it impossible to ‘consider the impact of a higher premium on their own personal financial circumstances and make choices regarding their property’.”
Council tax arrears
At the March meeting of Pembrokeshire County Council, members heard the county is facing nearly £9m in council tax arrears, in part due to an “unprecedented bloc” of some 90 homes unable to meet the 182-day holiday letting guidelines, leaving their owners liable for second homes premium rates.
At that meeting the-then Cabinet member for corporate finance Cllr Alec Cormack said there were seven classes of “exception rather than exemption” from the premium.
He said anyone in arrears should contact the revenues and benefits team, which was reaching payments plans for such circumstances.
The letter to the council added: “There is now a delay in the council offices in the processing of these applications for exceptions- as people try to avoid going into debt. People are being forced into that situation. Applications from April 17 for example, have not been processed and people have received pink/red bills and reminders causing great stress and concern.
“Many have contacted the benefits and welfare office, as was suggested by Councillor Cormack, and are either cut off after lengthy waits or are told that there is nothing that can be done. Some are saying that this is a conveniently manufactured way of continuing to milk the cash cow.
“Pursuing the goal of maximising income from this group of people who have contributed for seven years towards developing the housing stock, with nothing to show for it can best be described as thoughtless and at worst a deliberate attempt to ‘Stuff those who cannot vote,’ as one councillor described the arrangement.
“People are being placed in debt by the actions of the PCC. This must stop.”
Pembrokeshire County Council has been contacted for a response.
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I drive through Newport on most days. People who ‘improved the housing stock’ on the basis of the holiday industry knew that the holiday industry was controversial. It reinforces a low-income economic model and is socially destructive. These investors got lucky ih that the Welsh response to the problem was feeble. We still have not diversified away from tourism/2nd homes. But Pembs CC has not done nothing. Local people now have a (distant) hope that they can buy a home in their own home county.
It is far easier for the government to blame holiday home owners than admit they have failed on housing.
Too true, well said. Second homes are a smokescreen covering up housing policy failures and with increases in council tax helping to make up some of the shortfall in Tory austerity local authority funding.
Why should gov build houses because 2and home owners buy houses that locals need.
The failure on housing started 40 years ago with right to buy and reliance on markets and capitalism to provide the housing, it has been an abject failure as the masses of young people are aware. Right to buy ceased in Wales in 2019 and the premium on second homes in 2017, subsequently increased. But this can only affect the margins of the problem and hopefully stops the situation deteriorating. The situation has been made worse by the market over valuing property in England, Cheshire and Bristol forcing those with the resources to search for housing in Wrexham or Newport… Read more »
‘The other problem that has received little attention is the vast increase in students in university who live in previously family accommodation, large parts of Cathays in Cardiff became devoid of full time residents’. This has happened in Bangor Gwynedd particular in the upper part of the city.
‘We also need to stop treating housing as a financial asset’. An example should be set from the top, however that would mean the leader of a certain political party parting ways with his ‘investment property’.
One way forward – which many have taken, is to register the second home as a business premises, and make sure you operate it as such. Then you’ll be exempt from not only council tax, but if the rateable value is below £6000, you’ll pay no business rates either. When introducing the new rules, the Welsh government didn’t think of this. That’s because most politicians are not business-orientated, and quite frankly not particularly bright.
In order to qualify as a business and so be exempt the property will need to be available to let for 252 days a year and actually let out for 182 days, if these targets aren’t reached then the property is domestic and liable for council tax and premium if applicable.
Yes – hence ‘make sure you operate it as such’.
Those protesting don’t want to pay an increase in council tax neither do they want their second homes to become businesses for at least 180 days a year. .
Which would most likely be the times of year when the owners would like to use their second homes for holidays.
If you’re sitting on a largely-empty property then you’re clearly treating it as an investment, and investments usually have costs. You have a strategic choice to make: either pay, or sell up and invest somewhere else.
How is that moving Wales forward?
Of course they thought of it. If a habitable property must be taken out of use as a main residence during a national property crisis it’s much better if it’s full of visitors, who’ll be spending money in the local businesses, than sitting empty most of the time. And if the owner struggles to fill it with visitors most of the year because it’s not an attractive property for people to holiday in then they have the choice of paying their taxes, renting it to a local family or moving in themselves. If none of these options are acceptable they… Read more »
If you cant afford to pay, sell the property, dont moan about going into debt. I cant afford lots if things I would like, but I do not go into debt so that I can have them, live within your means.
So the premium is pushing owners into debt. Well, tough sh*t. Ponder a moment on the predicament of families who can’t afford a home in the area who are now in debt due to escalating rents and the inflation / cost of living pressures. Don’t anyone mention the “fall” in inflation, the reality suggests that indices are grossly inaccurate. There may be a minority of second home owners who are exceptional as they may for instance have been stuck with an inherited property off the beaten track. However most councils grant a period of grace, possibly at zero tax, to… Read more »
Absolutely! Run your let as a business – with all that goes with that, or rent whenever you come to Wales.
To bad, should have thought about it
When taking housing away from
Locals. Time second homes were banned through out the uk.
My heart bleeds, not!
The policy is working as it should and I hope it continues to do so
Oh dear, how sad, never mind.
well said battery sarn’t major Williams
Well don’t have two houses then, and you save yourself alot of money
We have a second home in St Davids and we support all the shops, cafes and pubs. Interestingly, those living permanently there shop in Haverfordwest and don’t use the pubs. There is no community without shops, cafes and pubs so I think those permanently living there need to thank all those second home owners for keeping all the businesses going.
Maybe if they hadn’t had to pay so much for their homes they could afford to go to the pubs and cafes.
According to National Park data in Tyddewi nearly 21% of properties are second homes
If this is a joke, it’s in bad taste. Holiday home owners contribute a fraction of what permanent residents contribute to local economies in Cymru.
Oh yes, you’re verging on sainthood. We should all bow down and give thanks for your bountiful largesse.
Have you spoken to every single resident living permanently in Tyddewi? They all said they go to Hwlffordd to shop and never go to pubs?
I believe the answer to the first question is “no” and the second is “don’t know” because you are making it up.
How many weeks of the year do you contribute to the local shops, cafes and pubs?
This is just a silly response.
Obviously a permanent resident contributes far more to the local economy than a weekender – even though the weekender might spend more per weekend.
I can see there might be some benefits for certain types of business – restaurants, for example, might actually do better with a mix of second homes.
Suggesting that locals should be grateful is either tone deaf or mischievous. I suspect the latter.
Has anyone heard of a builders merchant or builder, or plumber, or electrician complain about working for someone owning a second home? Second home owners have contributed hundreds of millions of pounds to local economies and kept hundreds of people in work.
Has anyone heard of a builders merchant or builder, or plumber, or electrician complain about working for someone that owns only one home?
Single home owners have contributed hundreds of millions of pounds to local economies and kept hundreds of people in work.
Gosh how those rich enough to have a second home love to moan. No thought from them of the hundreds of thousands of people in wales with no home at all.
Pay up or sell up I say.
Oh dear, how sad, never mind!
Tough! Most people are glad to have one home.
One topic which is rarely discussed in this context is the hefty extra council tax received. Even at 100% premium, if a council area has, say, 1,000 holiday homes that’s almost a couple of million extra revenue – with no liabilities for the expensive services – especially adult social care.
However, pushing this too far will kill that revenue source. Might be worth it to free up housing stock, but councils should be mindful of the reduction in council income which would occur if all second homes disappeared.